Designating the key players to run your business alongside you involves some of the most important hiring decisions you will ever make. How can you ensure your senior appointments are a catalyst to growth and not a costly mistake?
Running a start-up and a 100-strong team require different leadership skills. While some entrepreneurs will master the two with ease, not everyone is cut out for both. Even if you are, managing a large team may not be what gets your blood pumping.
However, whether you plan to stay hands-on or adopt a more strategic role as your company grows, serial entrepreneur Mike Harris insists one universal truth applies: once a business reaches a certain size, it needs to be managed by a team rather than an individual if it is to realise its full potential.
The right leader
“I think an entrepreneur can take a business to a certain size by pure energy, drive and enthusiasm alone,” says Ross Williams, founder and chief executive of Global Personals Ltd, which runs white-label dating sites for brands such as FHM, Maxim and Cosmopolitan. “But when you reach 60 to 80 staff, then it’s about getting the right processes in place, as things like HR issues start cropping up,” he continues.
While many entrepreneurs will have successfully juggled sales, marketing, accounts, recruitment, product development and everything else in the early days, as your team grows, managing it can become a full-time job in itself. Monitoring performance, motivating staff and meeting employment regulations will require formal processes to ensure nothing gets missed. Unless you let go of some of the decision-making, you’ll limit the speed of growth to the scope of your own abilities and resources, which could prevent new opportunities from being pursued.
Colin Mills, who set up The FD Centre to provide part-time finance directors to businesses, found himself in this very position. “I didn’t want to be one of those entrepreneurs where the business is what it is because of them, but also never got to where it could be,” he says.
As management issues began taking up more and more of his time, he saw the opportunity to split his role into two: MD and CEO. “In our type of business, which is professional services, you need fairly tight, hands-on management because you’ve got a lot of people to manage, keep happy and motivate,” he says.
Mills had been struck by the strong relationship skills possessed by one of his FDs, Sara Daw, over the three years she had been working for the firm, and subsequently promoted her to the role of managing director. Daw now focuses on where the business is today, enabling Mills to turn his attention to the future, ensuring they are focusing on the right priorities and “coaching rather than playing”. The business has since gone from strength to strength and acquired a major rival, FDUK.
Plugging the gaps
“Don’t jump to the conclusion that it has to be an MD”, adds Mike Harris, who has founded and grown a number of highly successful businesses, including First Direct, One to One and Egg. He is currently executive chairman of Garlik, a technology company that protects against identity fraud, and a partner in The Difference Engine, an incubator for small firms.
As the founder, Harris says there is one key question to ask yourself. “When I’m talking to entrepreneurs, I ask them: Do you want to lead the team, or would you rather manage the idea?” he says. In other words, are you an ideas person who would rather focus on the overall growth strategy than day-to-day responsibilities, or are you a detail-driven type who would prefer to lead the team?
When hiring senior managers you want to complement, rather than duplicate, your expertise. What are your objectives for your business, and what skills do you need to get you there? “It’s about bringing in the right balance of skills at the right time,” says Harris.
This involves an honest assessment of your own strengths and weaknesses. Admitting your shortcomings is never easy, but this will enable you to play to your strengths. It will also identify what type of senior roles or specialist knowledge would be most useful to your firm, whether that’s in finance, IT, marketing, operations, or something else altogether. Then it’s time to look at your existing employees. Do you have this expertise within your team or will you need to bring it in from elsewhere?
Knowing your limits
After growing and running his first business himself, Philip Wilkinson realised that managing a large team required meticulous attention to detail, which wasn’t his core interest or strength. “One thing that struck me was the massive time investment needed to get a company to that stage. It took about five or six years, a lot of work, admin and stress. Then you’ve got to start again from scratch with your next venture, he says.”
In his subsequent endeavours (he’s now on his fourth business) he has brought in an MD after a certain point, adopting a more strategic role himself. “I’m great at starting businesses, coming up with the planning, getting the team together and taking all the risks,” he says.
“Once it gets bigger and you start getting more professional, and you’ve suddenly got 20 people, which requires real organisation, that to me is always a perfect time to get a good MD on board, who’s more operational or experienced at managing bigger teams, because there are different skills involved. An MD isn’t necessarily the best person at the very beginning, but it gets to the point where you’re not the best person to run a business when it gets to a certain size.”
